The Birth of the Deutschmark: A social and financial history of German Currency Reform, 1945-1951

This research project provides a better understanding of the processes that accompanied the reforms of the Austrian schilling in 1947 and the birth of the deutschmark in 1948 by merging archival sources with financial data from banks and markets and comparing the two reforms.

The historical stability of the deutschmark and the reputation of the Bundesbank were among the driving-forces of European monetary integration. European integration was in many ways a reaction to West Germany’s economic miracle and stable currency of the 1950s and 1960s. After various attempts to limit exchange rate volatility had failed, the common currency established was designed to mimic the deutschmark’s stability while the new central bank aspired to inherit the Bundesbank’s credibility. To study the German currency reform is also to study an important turning point in Cold War history. In 1947, the four occupying powers of Austria decided to issue a single currency for all occupation zones. But in 1948, reforms in Germany led to separate currencies and split the country. The introduction of the deutschmark in the West was immediately followed by the Soviet blockade of Berlin and the division of Germany and Europe. This project also focuses on the Austrian precedent in order to explain the lack of cooperation in Germany.